Warren Buffett’s Berkshire Hathaway Inc. was a big winner from the recent tax reform.
Book value, a metric he’s known as a “crude, but practical” way to monitor the conglomerate’s worth, climbed 13 per cent to $211,750 each Class A share in the end of 2017 compared to 3 weeks before, the company said Saturday in an announcement. Analysts at Barclays Plc last month predicted the amount of assets minus liabilities would rise as Berkshire reduced its tax obligation on some appreciated investments. Buffett got a 29 billion increase to earnings in the fourth quarter.
Buffett had a mixed response to the tax reform passed by Congress this past year. In January, he praised the way the changes mean business owners are going to find a larger share of profits and said he would have voted for this as a representative of Berkshire’s shareholders. Nevertheless, when asked when he would have encouraged legislators fight or to support it, Buffett said he would have gone with a bill. While the law reduced the rate the billionaire investor has advocated for higher taxes on the wealthy.
This’s some other takeaways from Berkshire’s earnings report:
Operating earnings, which excludes some changes in derivatives and investments, slumped 24 percent to $3.3 billion during the fourth quarter in comparison with the same period a year before.
Berkshire’s cash pile swelled to $116 billion from $109 billion in the third quarter.
Full-year earnings from BNSF, the company’s railroad, climbed 11 percent to about $4 billion in 2017 compared to a year before.
Manufacturing, services and retailing operations reported that profit increased to $6.2 billion last year from $5.6 billion in 2016.
The insurance companies reported an underwriting loss of $2.2 billion as hurricanes and other all-natural disasters in 2017 weighed on outcomes, leading to the initial yearly underwriting loss after a 14-year streak of gains, ” Buffett said in the letter.